Flexible asset management can deliver on new affordable homes

The key issue is not to have centrally driven targets but to enable and facilitate housing associations to manage their assets in the most effective way to meet their aims. Giving associations the freedom and clear responsibility for doing this could drive efficiency, produce more homes and allow better analysis of local markets. It also has the potential to transform associations into the sort of entrepreneurial socially-focused rented property companies meeting a wide range of housing needs and aspirations that this country currently lacks.

If the social housing regulatory system was amended to allow providers to be more flexible in the use of stock, providers would then be free to find their own locally-based balance between:
• meeting local needs
• selling outmoded or inefficient stock
• selling properties to release equity
• investing in new homes
• investing in sustainable communities.

The project was commissioned by four associations: L&Q, Bromford, Waterloo and Circle Anglia in the lead up to the Comprehensive Spending Review to look at allocations of existing stock and new supply. It looks at freedoms beyond those offered to support development through the affordable rent model and therefore paints an authentic picture of the choices that associations might make if they were not constrained by the framework being developed by government.

Abigail Davies, CIH Head of Policy, said: “This research demonstrates what can really be achieved if housing associations are given greater freedom in managing their assets. It also shows the need to look beyond development viability to consider impacts on need, community investment, allocations and affordability. We will be keen to help the sector to develop the strategic skills to understand the dynamics of local housing markets and to plan and manage assets.”

Mervyn Jones, Director of Portfolio Management at Savills, said: “The numbers show that financial capacity can be created by actively managing assets. However, turning this capacity into finance for housing will require careful risk management and sophisticated business planning. Pushing rents too hard may not deliver the expected additional capacity.”

Dermot McRoberts, Group Finance Director at Waterloo Housing Group said: “We were pleased to contribute to this important research which clearly demonstrates the potential for associations to provide more affordable housing, if given greater freedom of choice over asset management decisions.”